DCIT, CHENNAI V. Mallika Gulvady, CHENNAI

ITA 1927/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81300 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Keywords: Bonafide belief
• Section: 54F; 2

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! , ' # BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI VIKAS AWASTHY JUDICIAL MEMBER. ./ I.T.A. NO.1927/MDS/2014 ( / ASSESSMENT YEAR : 2009-2010) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE XIII, CHENNAI. ( !$ /APPELLANT) VS MS. MALLIKA GULVADY, NO.2, RAJATATHNAM STREET, KILPAUK, CHENNAI 600 010. [PAN :AABPG 4208R] ( %&!$ /RESPONDENT) / APPELLANT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. / RESPONDENT BY : NONE /DATE OF HEARING : 04.12.2014. !' /DATE OF PRONOUNCEMENT : 31.12.2014. ' / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVE NUE ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VII, CHENNA I DATED 25.03.2014 FOR THE ASSESSMENT YEAR 2009-2010, WHER EBY THE PENALTY I.T.A.NO.1927 /MDS/2014 . :- 2 -: LEVIED U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) HAS BEEN DELETED . 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM REC ORDS ARE: THE ASSESSEE IS A PARTNER IN M/S. GREEN FIELDS FARMS AN D SERVICES. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2009-2010 ON 04.01.2010. IN HER RETURN OF INCOME THE ASSESSEE HAD OFFERED INCOME UNDER THE HEAD CAPITAL GAIN TO THE TUNE OF RS. 2,09,88,721/- AFTER CLAIMING EXEMPTION OF RS.53,50,462/- U/S. 54F OF THE ACT. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S. SU MANTH AND COMPANY FOR DEVELOPING AND CONSTRUCTING FLATS ON TH E LAND OWNED BY HER. THE BUILDER ALLOTTED TWO ADJACENT RESIDENTIAL UNITS TO THE ASSESSEE. IN HER WEALTH TAX RETURN THE ASSESSEE CL AIMED ONE RESIDENTIAL PROPERTY AS EXEMPT U/S. 5(VI) OF THE W EALTH TAX ACT. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF ASSESSEE U/S. 54F ON THE GROUND THAT THE ASSESSEE OWNS THREE RESIDENTIAL PRO PERTIES AND THUS IS NOT ELIGIBLE FOR CLAIMING EXEMPTION U/S. 54F OF THE ACT. THE ASSESSEE ACCEPTED DISALLOWANCE MADE BY THE ASSESSING OFFICER AND DID NOT PREFER ANY APPEAL AGAINST THE ASSESSMENT ORDER DATE D 30.12.2011. THE PENALTY PROCEEDINGS U/S. 271(1) (C) WERE INITI ATED AGAINST THE ASSESSEE FOR SUPPRESSING/CONCEALING THE FACTS. THE ASSESSING I.T.A.NO.1927 /MDS/2014 . :- 3 -: OFFICER VIDE ORDER DATED 27.06.2012 LEVIED PENALTY OF RS.15,25,000/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A)-VII, CHENNAI. THE COMMISSI ONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER DELETED THE PENAL TY ON THE GROUND THAT THERE WAS NO SUPPRESSION OR CONCEALMENT OF FAC TS. THE ASSESSEE HAD PLACED ON RECORD ALL MATERIAL FACTS. THE ASSESS EE HAD RELIED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS. SMT. K.G. RUKMINIAMMA 331 ITR 221 FOR CLAIMING EXEMPTION U/S. 54F OF THE ACT. THE ASSESSEE HAS OFFERED EXPLANATION FOR CLAI MING EXEMPTION U/S. 54F OF ACT, WHICH IS NOT FOUND TO BE FALSE. AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE H AS COME IN APPEAL BEFORE THE TRIBUNAL. 3. SHRI. P. RADHAKRISHNAN REPRESENT ING THE DEPARTMENT VEHEMENTLY SUPPORTED THE PENALTY ORDER PASSED BY TH E ASSISTANT COMMISSIONER OF INCOME TAX. THE LEARNED DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS NOT E LIGIBLE FOR CLAIMING EXEMPTION U/S. 54F OF THE ACT. SINCE THE ASSESSEE H AS CLAIMED EXEMPTION BY CONCEALING NUMBER OF RESIDENTIAL HOUSE S OWNED BY HER, IT IS A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. THE I.T.A.NO.1927 /MDS/2014 . :- 4 -: LEARNED DEPARTMENTAL REPRESENTATIVE PRAYED FOR SET ASIDE THE IMPUGNED ORDER AND RESTORE THE FINDINGS OF THE ASSI STANT COMMISSIONER OF INCOME TAX. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE. EVEN ON THE LAST DATE OF HEARING I.E. 22 ND SEPTEMBER, 2014, NONE HAD APPEARED ON BEHALF OF THE ASSESSEE. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES B ELOW AND HAVE HEARD THE SUBMISSIONS MADE BY THE LEARNED DEPA RTMENTAL REPRESENTATIVE. THE ASSESSEE HAD CLAIMED EXEMPTION U/S 54F OF THE ACT. THE ASSESSEE OWNS TWO RESIDENTIAL PROPERTIES AT PROJECT SRESHTA AND RETREAT IE. PLOT NOS.2 AND 3. SINCE BOTH THE RE SIDENTIAL PROPERTIES WERE CONTIGUOUS, THE ASSESSEE TREATED IT AS SINGLE RESIDENTIAL UNIT FOR THE PURPOSE OF CLAIMING EXEMPTION U/S.54F OF THE A CT. THE ASSESSEE BASED HER CLAIM ON THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF CIT VS. SMT. K.G. RUKMINIAMMA (SUPRA). 5. THE ASSESSEE OFFERED EXPLANATION DURING PENALT Y PROCEEDINGS FOR CLAIMING EXEMPTION U/S. 54F OF THE ACT. THE ASSESSEE MAY HAVE INTERPRETED THE JUDGEMENT OF THE HONBLE HIGH COURT IN ONE OF THE POSSIBLE WAYS AND ACCORDINGLY MADE HER CLAIM. THE E XPLANATION WAS I.T.A.NO.1927 /MDS/2014 . :- 5 -: FOUND TO BE BONAFIDE BY THE FIRST APPELLATE AUTHORI TY. THE ASSESSEE MAY HAVE MADE INCORRECT CLAIM UNDER BONAFIDE BELIEF , BUT THAT WILL NOT MAKE ASSESSEE LIABLE FOR PENALTY. THE HONBLE SUPR EME COURT OF INDIA IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS LTD R EPORTED AS 322 ITR 158 HAS HELD THAT MERE MAKING OF THE CLAIM, WHICH I S NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING IN ACCURATE PARTICULARS. IN SUCH CASES PENALTY PROCEEDINGS U/S.271(1) (C) IS NOT ATTRACTED. 6. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERITS. ORDER PRONOUNCED ON WEDNESDAY, THE 31 ST OF DECEMBER, 2014, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( ! ) (VIKAS AWASTHY) ' / JUDICIAL MEMBER #$ /DATED:31.12.2014. K.V $% &' (' /COPY TO: 1. ) APPELLANT 2. / RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. '+, - /DR 6. ,. / /GF. I.T.A.NO.1927 /MDS/2014 . :- 6 -: